TC50: Short On Cash? Startups Can Trade Goods And Services Instead Of Money On TheSwop

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For most startups just getting off the ground, cash on hand is extremely limited, to be reserved for only the most essential expenses. But that doesn’t mean these fledgling companies don’t have an abundance of talent. TheSwop, a new site making its debut today at TechCrunch50, is looking to help these startups and other growing companies trade ‘favors’ to each other, in whatever fields they specialize in. These can run the gamut from advertising and business planning to graphic design and development, or resources like office space.

Because exchanging goods and services this way can be a tricky business — you wouldn’t want to swap time with one of your extremely talented developers for work by a shoddy designer — TheSwop features one-on-one videos of each of its subscribers so that you can see the “whites of their eyes” before you consider a deal. Each subscriber also has a transaction history, as well as reviews left by other members. Another key feature, given the nature of many of these services: the site offers a map of each of its possible service providers, with paid subscribers (who are likely more trustworthy than free users) highlighted with larger markers.

Using the site is simple: you run a search for whatever you’re looking for, and then use the site’s virtual currency (called “favor points”) to trade for that. You can also perform transactions with cash if you’d like — the site doesn’t force you to use its platform, so you can take things offline to finalize the deal.

Roelof Botha: I don’t like it. Money was invented for a reason, we’ve seen people try to use beans etc. and it doesn’t work. I wouldn’t invest.
Marc Andreessen: Why limit it to startups? How do you ensure currency keeps its value?
A: If you’re a large company you’d probably use a larger barter exchange model. When you enter the site you get a certain number of points, you can buy more, but we won’t just flood the system with points.
Tony Hsieh: How do you make money, or at the end of the day do they owe lots of favors?
A: We’re freemium. Everyone can use for free, but you can pay to every larger map markers, other premium features.
Paul Graham: Why don’t you just let people buy favor points.
A: We’re considering that.
Andreessen: One thing barter companies in dot com era discovered is that there is a role for price discrimination — there are certain things that aren’t otherwise going to be available on the market, or would be charged for differently.
A: These would be the types of services that every startup needs.